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The Physical Internet ROADMAP TO THE PHYSICAL INTERNET EXECUTIVE VERSION © ALICE-ETP, 2020. Roadmap to the Physical Internet Authors and main contributors Eric Ballot, Sergio Barbarino, Bas van Bree, Fernando Liesa, J. Rod Franklin, Dirk ‘t Hooft, Andreas Nettsträter, Paolo Paganelli, Lóránt A. Tavasszy Acknowledgements Document elaborated in the frame of the project SENSE, Accelerating the Path Towards the Physical Internet. SENSE project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 769967 About ALICE-ETP The European Technology Platform (ETP) Alliance for Logistics Innovation through Collaboration in Europe (ALICE) is set up to develop a comprehensive strategy for research, innovation and market deployment of logistics and supply chain management innovation in Europe. The platform supports and assist the implementation of the EU Program for research: Horizon 2020 and Horizon Europe. Contact Fernando Liesa, Secretary General, ALICE [email protected] www.etp-alice.eu Illustrations Physical Internet video (ALICE, 2020) © contextman. Disclaimer ALICE-ETP’s Board does not guarantee the accuracy of the information included in this publication and does not accept responsibility for consequence of their use. This report aims to bring together the views of a wide range of stakeholders and experts in order to contribute to a Roadmap that could help stakeholders in logistics to define their own research and innovation agenda as well as market strategies in support of this roadmap realization. The views expressed in this report are a collection of those of the different stakeholders involved in ALICE and in the different activities carried out such as workshops, surveys, etc. As such, not everyone involved in this initiative may necessarily fully support all the views expressed in the report. All the stakeholders involved do share a common interest however: speed up decarbonisation while remaining fully competitive and supporting logistics innovation for a sustainable and competitive industry. 3 ROADMAP TO THE PHYSICAL INTERNET Contents EXECUTIVE SUMMARY 04 1 ROADMAP TO THE PHYSICAL INTERNET 05 1.1 Logistics Nodes. 08 Generations of Logistics Nodes 1.2 Logistics Networks. 12 Generations of Logistics Networks 1.3 System of Logistics Networks. 16 Generations of System of Logistics Networks 1.4 Access and Adoption. 20 Generations of Access and Adoption 1.5 Governance. 24 Generations of Governance 2 RECOMMENDATIONS 28 2.1 Recommendations for Companies 29 2.2 Recommendations for Government 30 2.3 Recommendations for Research & Development Partners and Academia 30 2.4 Recommendations for Civil Society 31 4 Executive summary In response to the Paris Agreement, more and more in the freight and transport industry. The existing idle governments, associations, and businesses are setting capacity of assets in all modes of transport and storage bold climate targets. As set out in the European Green could be better utilised, and flows could be managed in Deal, the ambition for the European Union is to be the a more consolidated way using and combining transport first climate-neutral continent in the world by 2050. This modes and other logistics assets smartly. Open and will be achieved with a two-step approach designed to interconnected logistics services and networks (building 2 reduce CO2 emissions by 50%, if not 55%, by no later the Physical Internet - PI) will maximise the capacity than 20301. utilisation meeting current and future demands. Value creation through efficiency should be used to speed up The deployment of greener and cleaner freight vehicles, the transition to greener and cleaner assets, instead of trains, barges, ships, and airplanes as well as low price reductions and margin erosion resulting from the emission energy solutions is forecasted to be too slow use of current assets. to deliver on the European Commission’s 2030 climate change targets. In parallel to the development of lower Indeed, in a scenario in which all identified potential and zero tailpipe emission vehicles and low emission efficiencies are achieved, the forecasted 300% increase energy, it is fundamental to leverage opportunities for in transport demand3 could be reached with an increase increased logistics efficiency. We envision large gains of only 50% in assets4. Environmental sustainability could and benefits to all stakeholders by doing more with less be achieved in an economical and socially feasible way. Physical Internet will support the transition towards Zero Emissions Logistics The Physical Internet is probably the most ambitious answer that demand, it is expected that the usage of the concept towards efficiency and sustainability in transport resources is more efficient. The Physical Internet includes logistics. It stands for a far-reaching transition of freight transport, storage and physical handling operations transport and logistics so assets and resources can be of load units such as containers, swap-bodies, pallets, used in a much more efficient way. The PI builds on the boxes, etc. extensive and systemic consolidation of flows and the network of networks concepts. The Physical Internet This document is a comprehensive roadmap towards the proposes a full consolidation of logistics flows from Physical Internet (PI). The roadmap sketches a path from independent shippers (e.g. extended pooling and shared now to 2040 showing important milestones, required networks). Additionally, and to deliver customer value, technologies and first implementation opportunities for the Physical Internet proposes to pool resources and the PI. Advanced pilot implementations of the Physical assets in open, connected, and shared networks (i.e. Internet concept are expected to be operational and connecting existing (company) networks, capabilities and common in industry practice by 2030, contributing to resources) so they can be used seamlessly by network a 30% reduction in congestion, emissions and energy users and partners. By pooling demand and resources to consumption from the transport sector. 1. U. von der Leyen (2019) A Union that strives for more. My agenda for Europe 2. Ballot É., B. Montreuil, R. Meller (2015), The Physical Internet: The Network of Logistics Networks, Documentation Française. For more information: visit www.etp-alice.eu and watch a video. 3. OECD (2019. ITF Transport Outlook 2019. 4. Barbarino (2018). Towards Zero Emissions via Physical Internet: Opportunities, Challenges & perspective. IPIC 2018. ROADMAP TO THE PHYSICAL INTERNET 5 1 ROADMAP TO THE PHYSICAL INTERNET The SENSE project developed a Physical Internet roadmap (Figure 1) to explain the development of the PI over the next twenty years around five areas of development: 1. From Logistics Nodes to PI Nodes – In Logistics Nodes, goods are consumed, stored, transformed, or transhipped from one transport mode to another. Ports, airports, logistics hubs, terminals, distribution centres, warehouses, depots are examples of Logistics Nodes. The Physical Internet envisions the development of the Logistics Nodes into Physical Internet nodes in which the operations are standardised and the usage of a family of standard and interoperable modular load units from maritime containers to smaller boxes is extensive. Services in PI nodes are visible and digitally accessible and usable including planning, booking and execution operations. 2. From Logistics Networks to Physical Internet Networks – Logistics Networks include Logistics Nodes as well as the transportation services connecting the Logistics Nodes and reaching to the destination. Logistics Networks are under the control of a single company either a shipper, a freight forwarder or a logistics service provider reaching their value chain (i.e., customers and suppliers). PI Networks are expected to build seamless, flexible and resilient, door-to-door services consolidating and deconsolidating all shipments within a logistics network in which all assets, capabilities and resources are seamlessly visible, accessible and usable to make the most efficient possible use of them; 3. Developing the System of Logistics Networks towards the Physical Internet – Includes individual logistics networks that are interconnected. Therefore, the assets, services and resources of the individual logistics networks can be accessed by all logistics networks owners. The System of Logistics Networks forms the backbone of the Physical Internet and requires secure, efficient and extensible services for the flow of goods, information and finances across logistics networks; 4. Access and Adoption – This area describes the main requirements to access the Physical Internet through a logistics network part of it. It also includes different steps and the mind shift required to adopt Physical Internet concepts. 5. Governance – Governance includes the developments needed to evolve the Logistics Nodes, logistics networks and the System of Logistics Networks into the Physical Internet, i.e. the rules defined by the stakeholders forming or using them as well as the trust building processes and mechanisms. Developments in each of the areas have already started (2015-2020) and show the possible developments in “generations” until 2040. Generations define possible evolutions towards the PI and can be scenarios or parts of PI-like implementations. Generations at medium- and long-term involve more technical, operational, and business complexity. In some cases, generation can be jumped, i.e. stakeholders or companies may directly address
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